A mechanics lien (also called a contractor’s lien or materialman’s lien) is a contractor’s first line of defense in collecting payment owed on a construction project. However, Texas has a complicated set of requirements for properly filing a lien on commercial property. Therefore, missing any of the many required steps will likely invalidate the lien and forfeit the lien rights associated with the unpaid money.
What is an Invalid Lien?
An invalid lien is a lien that was not properly filed against a project. The contractor who filed the lien is probably still owed money, but the lien affidavit was not properly perfected because the correct steps were not taken. When it comes to filing a mechanics lien in Texas, it’s imperative to know and follow the requirements set forth by law. As mentioned earlier, missing any of the requirements will invalidate the lien.
Know the Rules
The first step is protecting yourself in a lien situation is to familiarize yourself with the Texas Construction Laws involving construction or mechanics liens. These laws outline the requirements, such as deadlines and statutory forms required. To simplify the process, we outline everything you need to know in this post about what is involved in filing a lien on a property in Texas. As you will see, there are a lot of deadlines and requirements for perfecting a lien and missing just one can completely invalidate the process.
Common Lien Mistakes
Here a few common mistakes that can result in an invalid lien filed on a property:
1. A prelien notice was not filed before the lien affidavit.
2. A prelien notice was sent after the deadline.
3. The prelien notice was not sent via certified mail, return receipt requested.
4. The lien amount is incorrect because part of the “owed” invoice was already paid.
5. The proper form (as required by law) was not used to file.
Fortunately, you can easily avoid making these and other mistakes when filing a lien on a property by using a service like www.texaseasylien.com. Founded by an attorney, Texas Easy Lien provides everything you need to easily and affordably file a lien on a property (ex: legal forms, a complete schedule of deadlines, online notarization, and online filing).
What is a Fraudulent Lien?
A lien is determined “fraudulent” when a person knowingly and intentionally files a lien with the intention of defrauding others by using incorrect information. Filing a fraudulent lien is a criminal offense. Additionally, a person knowingly and intentionally filing a fraudulent lien may be held liable in civil district court for the greater of $10,000 or actual damages, exemplary damages, and recovery of attorney’s fees and costs.
It is important to note that there is a significant distinction between an improper lien (or invalid lien) and a fraudulent lien. A fraudulent lien is one whereby the person is trying to defraud others and whereas an invalid lien is one whereby the filer used incorrect or inaccurate information. An improper or invalid lien filed on a property is typically the result of a mistake and it is not punishable by criminal law. However, it can result in forfeiture of your lien rights altogether.
Rely on the Experts
If you are a contractor owed money for work completed on a commercial construction project, we encourage you to learn more about your lien rights AND the lien filing process, so you can protect your payment rights. Our helpful FAQ section is a great resource for answering common lien or bond claim questions. At Texas Easy Lien, we’re here to help you protect your payment rights, preserve your lien rights, and make the lien filing process easy and affordable.